Wednesday, October 9, 2013, 5:02 PM ET|Posted by Will Richmond
AOL has scored a huge coup with a deal announced today to syndicate ESPN video content across its owned-and-operated sites, plus its distribution network of 1,700 publisher sites. ESPN video in AOL will be accessible on desktops, smartphones, tablets and connected TV devices.
Importantly, the deal underscores the allure of online video syndication. By choosing to syndicate through AOL, ESPN concluded - despite its already formidable presence as the top-ranked sports property online - that AOL's distribution network could provide still further online reach and monetization potential. That's no small statement, and it is a testament to both AOL's video growth over the past several years and to the strength of the "Syndicated Video Economy" concept I began talking about back in 2008.
In fact, AOL has become hands-down the biggest beneficiary of the syndication model, ascending to the #2 position in BOTH unique viewers (71 million) and total video views (992 million) in comScore's August 2013 U.S. online video rankings. AOL's stature is based largely on the power of its 3rd-party distribution network and syndication platform, acquired via its 5Min deal in 2010.
AOL's viewership has expanded beyond that of some of the most recognized destination brands online (e.g. Yahoo, Viacom, Hulu, Microsoft, Turner, etc.), now trailing only YouTube, the market's perennial 800-pound gorilla. As important, AOL is translating its viewership into financial results; last November, AOL CEO said the company's video-related ad revenue has jumped 10x to over $100M annually in the past 2 years.
Now, with the ESPN deal, AOL's video viewership and ad revenue are poised to move still higher. Under the deal, ESPN will syndicate to AOL short-form news, highlights and analysis from "SportsCenter" and other programs. ESPN will also help AOL editors place contextually-relevant clips within AOL and partners' sites, and it will create a branded ESPN library of videos (already live with 600+ clips).
ESPN is handling ad sales for the deal, with revenue shared by AOL and its publisher network. It's also worth noting that the ESPN content is freely available on AOL and its network, meaning that the deal falls outside of authenticated TV Everywhere full-length programming access. Last, this is actually the second big sports syndication deal this week, as CineSport and USA TODAY Sports Media Group just announced a deal on Monday.